Resident Alien living in Washington State but working in British Columbia - Medical and Green Card rules.

QUESTION:

I start working for a Canadian company next week. I am living in Washington state and have legal resident status. I am a Canadian citizen. Do I pay Canadian taxes only on the income earned? Or do I pay both US and Canadian taxes?
Any advice would be greatly appreciated.

-------------------
david ingram replies:

You will file your Canadian return first and pay taxes to Canada.
Then, as a US resident, you will report the money again and claim a
foreign tax credit on form 1116 or your US 1040. the foreign tax
credit will consist of the Federal and Provincial taxes plus the CPP
and EI you paid.

You should not continue with BC Medical or have a BC driver's licence
anymore if you are moving to the US or already living there.

You must buy Washington State Blue Cross or its equivalent. For BC
medical to be valid (even if you pay premiums or are working in the
daytime in BC and it is being paid by your BC employer), you must sleep
in Canada. It is not good enough to be working full time in Canada and
paying full taxes to Canada; you MUST live in Canada. You can NOT
keep your green card AND BC Medical at the same time unless you file US
form I-131 with US Immigration and move back to Canada to keep the
Canadian medical alive and keep your green card.
-----------------------
This might help as well.

My_question_is: Applicable to both US and Canada
Subject: Canadian, US Perm Res, working in Canada
Expert: taxman@centa.com
Date: Monday January 14, 2008
Time: 05:48 PM -0000

QUESTION:

hello
I am a Canadian citizen with US resident status, working full time in
Canada.

1. Will my only tax paid, to both countries be paid to Canada through
payroll tax?
2. Do I have to file a US tax return?
3. Am I eligable to pay a reduced tax rate to Canada?
4. Investment company in Canada is refusing to allow me to set up a
payroll RRSP deduction in which I am matched by the company I work
for. Can they do this?
5. If I am required to cancel my OHIP health coverage in Canada, am I
entitled to a tax reduction that would normally be designated to that
coverage?

Thanks

-----------------------------------------------------

david ingram replies;

I assume that you are living in Detroit and working in Windsor or
Living in Bellingham and working in Vancouver or something to that
effect.

If that is so, you can participate in a company pension plan but
matched RRSP contributions are difficult because the financial company
handling it for your employer is not licenced to sell to or deal with
a non-resident of Canada .

1. You will pay Canadian Income Tax, CPP and EI. You will then
report the same income to the USA on a 1040 and claim credit for the
taxes paid to Canada on US form 1116. It is unlikely that you will owe
the US more on the wages but you might if you have other investments in
the USA.

2. YES

3. NO

4. As explained, the company is not licenced to deal with you as a
non-resident. I will give the names of two people who can work with
your company to set it up for you.

5. NO - You have to sleep in Ontario more than 153 days a year to
qualify for OHIP. You could live in Ontario for 155 days and the US
for 210 days and keep OHIP AND your US resident alien (green) card
alive. (Ontario is the only province with 153 days - all other
provinces and all three territories require you to be there 183
nights.) Therefore, Ontario is the only province that you can legally
arrange yiuor affairs to have both a valid Green card AND a valid
Provincial OHIP card).

This gives you the names of two people who can solve your RRSP problem.

Two ethical people who specialize in selling securities, RRSPs, etc.,
to US citizens or green card holders in Canada or Canadians in the US
are:

Dan Walkow
Seabank Financial
White Rock
Local (604) 541-9952
L D (866) 541-9952www.seabankcapital.com
__
These two individuals and their companies have gone to the effort to
get themselves registered just about everywhere so they can deal with a
Canadian in Florida or California or Nevada, or an American in Ontario
or BC., etc.
____________________________________

Note that because of their specialty, they tend to deal with accounts
in excess of $200,000

However, I am sure that both parties would welcome an exploratory call.

---------------------

On February 11, 2008, David
Ingram wrote:

It is very unlikely that blind or unexpected email to me will be
answered. I receive anywhere from 100 to 700 unsolicited emails a day
and usually answer anywhere from 2 to 20 if they are not from existing
clients. Existing clients are advised to put their 'name and PAYING CUSTOMER' in the subject line
and get answered first. I also refuse to be a slave to email and do
not look at it every day and have never ever looked at it when I am out
of town. e bankruptcy expert US Canada Canadian American
Mexican Income Tax service and help

However, I regularly search for the words"PAYING
CUSTOMER" and always answer them first if they did not get spammed out.
For the last two weeks, I have just found out that my own email notes
to myself have been spammed out and as an example, as I wrote this on
Dec 25, 2007 since June 16th, my 'spammed out' box has
47,941 unread messages, my deleted box has 16645 I have actually looked
at and deleted and I have actually answered 1234 email questions for
clients and strangers without sending a bill. I have also put aside
847 messages that I am maybe going to try and answer because they look
interesting. -e bankruptcy expert US Canada Canadian American
Mexican Income Tax service and help

Therefore, if an email is not answered in 24 to
48 hours, it is likely lost in space.
You can try and resend it but if important AND YOU TRULY WANT OR NEED
AN ANSWER from 'me', you will have to phone to make an appointment.
Gillian Bryan generally accepts appointment requests for me between
10:30 AM and 4:00 PM Monday to Friday VANCOUVER (Seattle, Portland, Los
Angeles) time at (604) 980-0321. david ingram expert
US Canada Canadian American Mexican Income Tax service and help.david ingram's US / Canada Services
US / Canada / Mexico tax, Immigration and working Visa Specialists
US / Canada Real Estate Specialists
My Home office is at:

Calls welcomed from 10 AM to 9 PM 7 days a week
Vancouver (LA) time - (please do not fax or
phone outside of those hours as this is a home office) expert US Canada Canadian American
Mexican Income Tax service help.

Disclaimer:
This question has been answered without detailed information or
consultation and is to be regarded only as general comment. Nothing
in this message is or should be construed as advice in any particular
circumstances. No contract exists between the reader and the author and
any and all non-contractual duties are expressly denied. All readers
should obtain formal advice from a competent and
appropriately qualified legal practitioner or tax specialist for expert
help, assistance, preparation, or consultation in connection with
personal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must be
included." e bankruptcy expert US Canada Canadian American
Mexican Income Tax service and help.

David Ingram
gives expert income tax service & immigration help to non-resident
Americans & Canadians from New York to California to Mexico
family, estate, income trust trusts Cross border, dual citizen - out of
country investments are all handled with competence & authority.

Phone consultations
are $450 for 15 minutes to 50 minutes (professional hour). Please note
that GST is added if product remains in Canada or is to be returned to
Canada or a phone consultation is in Canada. ($472.50 with GST if in
Canada)expert US Canada Canadian American
Mexican
Income Tax service and help.

This is not intended to be definitive
but in general I am quoting $900 to $3,000 for a dual country tax
return.

$900 would be one T4 slip one W2 slip
one or two interest slips and you lived in one country only (but were
filing both countries) - no self employment or rentals or capital gains
- you did not move into or out of the country in this year.

$1,200 would be the same with one
rental

$1,300 would be the same with one
business no rental

$1,300 would be the minimum with a
move in or out of the country. These are complicated because of the
back and forth foreign tax credits. - The IRS says a foreign tax credit
takes 1 hour and 53 minutes.

$1,600 would be the minimum with a
rental or two in the country you do not live in or a rental and a
business and foreign tax credits no move in or out

$1,700 would be for two people with income from two countries

$3,000 would be all of the above and
you moved in and out of the country.

This is just a guideline for US /
Canadian returns

We will still prepare Canadian only
(lives in Canada, no US connection period) with two or three slips and
no capital gains, etc. for $200.00 up.

With a Rental for $400, two or three
rentals for $550 to $700 (i.e. $150 per rental) First year Rental -
plus $250.

A Business for $400 - Rental and
business likely $550 to $700

And an American only (lives in the US
with no Canadian income or filing period) with about the same things in
the same range with a little bit more if there is a state return.

Moving in or out of the country or
part year earnings in the US will ALWAYS be $900 and up.

TDF 90-22.1 forms are $50 for the
first and $25.00 each after that when part of a tax return.

8891 forms are generally $50.00 to
$100.00 each.

18 RRSPs would be $900.00 - (maybe
amalgamate a couple)

Capital gains *sales) are likely
$50.00 for the first and $20.00 each after that.

Catch - up returns for the US where we use the
Canadian return as a guide for seven years at a time will be from $150
to
$600.00 per year depending upon numbers of bank accounts, RRSP's,
existence of rental houses, self employment, etc. Note that these
returns tend to be informational rather than taxable. In fact, if
there are children involved, we usually get refunds of $1,000 per child
per year for 3 years. We have done several catch-ups where the client
has recieved as much as $6,000 back for an $1,800 bill and one recently
with 6 children is resulting in over $12,000 refund.

This is a
guideline not etched in stone. If you do
your own TDF-90 forms, it is to your advantage. However, if we put them
in the first year, the computer carries them forward beautifully.

David Ingram expert income tax service and immigration help and
preparation of US Canada Mexico
non-resident and cross border returns with rental dividend wages
self-employed and royalty foreign tax credits family estate trust trusts
income tax convention treaty advice on bankruptcy